S&P 500 scales to close slightly lower as end of quarter approaches

A screen displays stock trading information on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 27, 2022. REUTERS/Brendan McDermid

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NEW YORK, June 29 (Reuters) – The S&P 500 ended a session slightly lower on Wednesday as investors limped towards the finish line of a bearish month, dismal quarter and worst first half for the S&P 500 since that of President Richard Nixon. first term.

The three major US equity indices spent much of the session hovering between red and green.

“The market is struggling to find direction,” said Megan Horneman, chief investment officer at Verdence Capital Advisors in Hunt Valley, Maryland. “We’ve had some disappointing data, and the markets are waiting for earnings season, when we’ll have more clarity” regarding future earnings and an economic downturn.

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Market leaders Apple (AAPL.O), Amazon.com (AMZN.O) and Microsoft (MSFT.O) provided the muscle on the upside, while economically sensitive chips (.SOX), small caps (. RUT) and transportation (.DJT) underperformed the market as a whole.

With the end of the month and the second quarter a day away, the benchmark S&P 500 index has set the course for its biggest percentage decline in the first half since 1970.

As for the Nasdaq, it was on course for its worst performance in the first half, while the Dow Jones appeared on track for its biggest January-June percentage decline since the financial crisis.

All three indexes were expected to post their second consecutive quarterly declines. The last time this happened was in 2015.

“We have a central bank that has had to move from decades-old easy money policy to a tightening cycle,” Horneman added. “It’s new for a lot of investors.”

“We are seeing price revision for what we expect to be a very different interest rate environment going forward.”

According to preliminary data, the S&P 500 (.SPX) lost 3.13 points, or 0.08%, to end at 3,817.90 points, while the Nasdaq Composite (.IXIC) lost 4.62 points, or 0.04%, to 11,176.92. The Dow Jones Industrial Average (.DJI) rose 73.06 points, or 0.24%, to 31,020.05.

Benchmark Treasury yields have risen more than 1.606 percentage points so far in 2022, their biggest first-half jump since 1984. That explains why interest-rate-sensitive growth stocks (.IGX) have plunged more than 26% since the start of the year.

Federal Reserve officials have in recent days reiterated their determination to contain inflation, setting expectations for their second consecutive 75 basis point hike in interest rates in July, while expressing confidence that the monetary tightening will not tip the economy into recession. Read more

In economic news, data from the US Commerce Department showed that GDP contracted slightly more than previously indicated in the first three months of the year, consumer spending, which accounts for about 70% of the economy, contributing significantly less than originally announced. Read more

This follows Tuesday’s consumer confidence report, which showed consumer expectations dropping to their lowest level since March 2013.

The second-quarter reporting season remains several weeks away, and 130 of the S&P 500 companies have announced in advance. Of these, 45 were positive and 77 were negative, giving a negative-to-positive ratio of 1.7 stronger than in the first quarter but weaker than a year ago, according to Refinitiv data. .

What will investors be listening to in these earnings calls?

“Margin pressures, that’s the big concern, pricing pressures, reduced capital plans due to the downturn, and if they see an improvement in the supply chain,” Horneman said. .

Packaged food company General Mills Inc (GIS.N) jumped after sales beat estimates. Read more

Bed Bath & Beyond Inc (BBBY.O) fell after the retailer announced it had replaced CEO Mark Tritton, hoping to reverse a crisis. Read more

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Reporting by Stephen Culp; additional reporting by Amruta Khandekar and Shreyashi Sanyal in Bangalore; Editing by David Gregorio

Our standards: The Thomson Reuters Trust Principles.

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